Botswana Gov't Looking to Invest in Lucara Diamond

Mining and Exploration
17/06/2019 11:46

President Mokgweetsi Masisi is said to have opened negotiations with Lucara Diamond Corp. for the government to buy and own shares in the company, reports The Botswana Gazette. Masisi reportedy met with Lucara CEO Eira Thomas at JCK Las Vegas, telling the newspaper, “I have proposed for Lucara to allow government to invest in the company,” adding that he will discuss with his cabinet and relevant authorities to agree on investing in Lucara.

According to Masisi, the government realised that Lucara, which operates the Karowe Diamond Mine in Botswana, has been consistently unearthing large high quality diamonds, which continue to fetch millions. “As a country we could benefit from such value,” he said. However, Masisi did not reveal how much stake is government interested in buying; neither did he reveal how soon the government will seek to make an investment. Ironically, the government of Botswana used to have an indirect stake in Karowe Diamond Mine, previously named AK6 project, through its 15 percent stake in De Beers. The miner held a 70.3% stake in Boteti Exploration, which Lucara purchased from De Beers in 2009 for $49 million. Lucara then acquired African Diamonds in 2010 to hold 100 percent of the asset. According to Masisi, Lucara has made five times more money than they used to buy Karowe Diamond Mine.

Debswana had undertaken work on Korowe (AK6) project between 1986 and1998, but De Beers considered it too small to mine. Lucara saw potential, and after further exploration it constructed the mine between 2010 and 2012, with commissioning and its first diamond sales starting in 2012. The processing plant was upgraded in 2014 to a “Large Diamond Recovery Circuit”, and has yielded some of the largest gem-quality diamonds the world has ever seen, with the Lesedi La Rona (1,109 ct) and the Constellation (813 ct) being the most prominent. Since 2015, no less than 12 diamonds bigger than 300 carats have been discovered at Karowe, and it regularly produces high-quality stones in excess of 100 carats.